Indie or Employee

June --

In November I began training to be a sign language interpreter and speech therapist. The company has numerous franchises across the country and hires all of its trainees as independent contractors. They train us. They find us clients. We train on their facilities using their materials, following their schedules. They monitor and correct our performance.They instruct us on how the procedures are to progress, and specify certain milestones but they do not tell us exactly what order to teach the procedures.

I have been through the Indie checklist over and over and I can't come up with a written justification of how this job meets the IRS requirements. My contract with them stipulates I am an independent contractor, and they tell the new hires how much money we can save with all of the deductions.

I wrote the company requesting justification for its classification of workers as independent contractors. I received no response. I've put in over 100 hours of training preparing for this job. I don't want to step into a problem. Can my local IRS office help me with clarifying this status, and if I ask them, am I opening up an audit nightmare for this company and their trainers?

Penelope


Hello Penelope,

You are the fourth person that I know that's in this situation.. The other three came to me for in-person consultations. They were doing similar work -- therapy and testing of children.

In their cases the agency was contracted by the state and then the indie was contracted by the agency. The agency got a lot more money from the state than it paid the indie. These three people did not want to open any can of worms and saw it as their first "job" before going out on their own. So they put up with it and worked as indies.

I would think if your company has franchises all over the country they must have some kind of information to give you on how they justify the work relationship.

By the way, the company, too, saves a lot of money by hiring you as an indie rather than an employee.

Based on the other three situations, that I checked thoroughly, and your description about your company, my guess is that you should work as employee status. Of course, I don't have all your info.

You have three choices:
1. Do nothing and work as an indie.
2. Pursue a statement from the company. You might even let them know that if you get no response from them that you'll request a ruling from the IRS. That might move them along. Or it might get you fired, or not hired.
3. Request a ruling from the IRS. I'd have to get you info on that because I can't remember off the top of my head what form it's done on.

Let me know what you decide.

Best regards,
June